| Fri 25 May 2001, 0:00 | | Peregrine - Audited Results |
|
PEREGRINE HOLDINGS LIMITED
Registration number 1994/006026/06
("Peregrine")
Audited results for the twelve months ended 31 March 2001
Group income statement
Year ended Year ended Increase
31 March 31 March 2000 to
2001 2000 2001
R'000 R'000 %
Revenue 189 050 143 778 31
Operating expenses (65 553) (44 942) 46
Profit from operations 123 497 98 836 25
Net interest received 9 041 6 221
Profit before taxation 132 538 105 057 26
Taxation (22 927) (19 272)
Profit after taxation 109 611 85 785 28
Income from associate
companies 2 871 16 420
Net profit 112 482 102 205
Minority interest (5 428) (5 126)
Attributable earnings 107 054 97 079 10
Headline earnings
per share (cents) 49,9 46,1 8
Earnings per share
(cents) 49,6 46,1 8
Diluted headline earnings
per share (cents) 49,9 46,1* 8
Dividend per ordinary
share (cents) - 10,0
Number of shares in
issue ('000) 215 825 212 682
Weighted average
number of shares in
issue ('000) 215 825 210 663
*Restated
Group Balance sheet
31 March 31 March
2001 2000
R'000 R'000
Assets
Non-current assets 326 913 274 674
Property, plant and equipment 11 573 5 042
Intangible assets 6 839 -
Deferred taxation - 382
Investment in associate companies 68 127 115 544
Investments 226 594 139 926
Employee share incentive scheme 13 780 13 780
Current assets 148 560 90 584
Trading assets 25 228 14 737
Accounts receivable 44 421 33 516
Cash and cash equivalents 78 911 42 331
Total assets 475 473 365 258
Equity and liabilities
Capital and reserves 395 953 313 693
Share capital 222 219
Share premium 24 189 24 192
Accumulated profits 251 102 147 224
Non-distributable reserves 2 430 -
Amounts due to vendors 112 700 131 438
Deferred income reserve 5 310 10 620
Minority interest 11 716 7 335
Non-current liabilities 7 741 6 253
Interest-bearing borrowings 5 299 6 253
Deferred taxation 2 442 -
Current liabilities 60 063 37 977
Accounts payable 49 220 24 175
Taxation 10 843 13 802
Total equity and liabilities 475 473 365 258
statement of changes in equity
Year ended Year ended
31 March 31 March
2001 2000
R'000 R'000
Equity at beginning of
the year 313 693 129 887
Changes in share capital and
share premium - 24 209
Issue of shares - 173 619
Share issue expenses
written off - (618)
Reduction of share premium
due to write-off of goodwill - (148 792)
Changes in retained earnings 103 878 96 878
Net profit for the year 107 054 97 079
Dividends (3 176) (201)
Changes in reserves (2 880) (6 377)
Increase in non-distributable
reserves 2 430 -
Decrease in deferred income reserve (5 310) (6 377)
Changes in amounts due to
vendors (18 738) 69 096
(Decrease)/increase in amounts
due to vendors (18 738) 69 096
Equity at end of the year 395 953 313 693
Group cash flow statement
Year ended Year ended
31 March 31 March
2001 2000
R'000 R'000
Cash flow from operating activities 74 184 66 251
Cash generated from operations 88 951 76 738
Net interest received 9 041 6 221
Dividends paid (3 176) (1 201)
Taxation paid (20 632) (15 507)
Cash flow from investing activities (16 759) (212 573)
Acquisition of property, plant
and equipment (13 489) (3 662)
Expenditure on intangibles (6 839) -
Acquisition of subsidiaries - (35 864)
Acquisition of investments and
associate companies (121 677) (194 137)
Proceeds from sale of fixed assets 2 374 -
Proceeds from sale of investments 34 486 21 090
Proceeds from sale of assets
of associate 88 386 -
Cash flow from financing activities (20 845) 159 927
Net proceeds from share issue - 173 001
Payments to vendors and minorities (6 749) -
Increase in loans to associate
companies (13 142) -
Increase in loan to employee
share incentive scheme - (13 780)
(Decrease)/increase in interest-
bearing borrowings (954) 706
Net increase in cash and
cash equivalents 36 580 13 605
Cash and cash equivalents at
beginning of the year 42 331 28 726
Cash and cash equivalents
at end of the year 78 911 42 331
Segmental analysis
31 March 2001 31 March 2000
% %
Profit from contri- Profit from contri-
operations bution operations bution
Asset management and
related services 61 295 50 60 590 61
Investment banking and
private equity 19 941 16 16 721 17
Financial software
development 1 776 1 2 102 2
Advisory 40 485 33 19 423 20
123 497 100 98 836 100
Associates 2 871 16 420
126 368 115 256
*Restated for comparative purposes
Introduction
The past year has been the most challenging experienced by the group since
inception. Negative factors included a volatile and difficult macro-
operating environment, negative sentiment toward financial services
companies in general, a weak share price, as well as continued uncertainty
with respect to McCarthy Bank Holdings and its attendant shareholder issues.
Despite these difficulties, Peregrine has produced real growth in earnings
for the year under review. In addition, the group has recently revised its
remuneration model, the implementation of which has been exceptionally well
received by staff. Furthermore, subsequent to year-end, all issues
pertaining to McCarthy Bank Holdings have been resolved including related
shareholder issues. Shareholders are referred in this regard to the
announcement accompanying these results.
Results
Profit after taxation for the year ended 31 March 2001 increased by 28% to
R109,6 million from R85,8 million the previous year. This satisfactory
performance from the group's operating subsidiaries was dampened by the
substantial decline in the income from associates, to R2,9 million for the
year under review from R16,4 million earned in the previous year. This
decline was almost exclusively attributable to the non-performance of
McCarthy Bank Holdings in the year under review. Attributable earnings for
the group were consequently 10% higher at R107,1 million and headline
earnings per share were 8% higher at 49,9 cents.
Operations
The contributions from the group's four core divisions, at the level of
profit from operations, are indicated in the financial results above. For
purposes of clarity, the individual companies or entities that comprise each
business grouping are listed under their respective divisional headings
below.
Asset management and related services
* Peregrine Capital
* PeregrineQuant
* Equity structuring and broking
* Prosperity multi-manager
This division contributed 50% of the group's profit from operations. For a
third successive year Peregrine Capital, the group's hedge fund management
company, produced industry-leading results across its suite of funds. This
outstanding performance in the face of difficult market conditions resulted
in a strong contribution to the division's profit from operations. A longer
than expected lead time in attracting assets at PeregrineQuant as well as
weaker performances from both Peregrine Structuring and Peregrine Equities
were responsible for this division only showing a marginal increase in
profitability for the year under review.
Whilst Prosperity multi-manager has recently begun to win mandates, which
will ultimately yield benefits for the other businesses within the division,
no contribution was made in the year under review.
Advisory
* Peregrine Specialised Finance
* Peregrine Asset Finance
* Peregrine Treasury Solutions
* Peregrine Corporate Advisory
* TW Ferguson
Peregrine Specialised Finance, by expanding and enhancing its product
offering to the South African corporate market in the year under review, saw
a marked increase in the number of deals successfully concluded. This
boosted its already strong annuity flow of income, which contributed
meaningfully to the earnings growth of this division. The acquisition of the
business of Peregrine Asset Finance as well as of corporate and tax
structuring specialists, TW Ferguson, during the year under review, further
increased the earnings growth of this division. All of the businesses in
this division are expected to show significant growth in the ensuing year.
Investment banking and private equity
* Peregrine Investment Banking
* Agio
The contribution from Peregrine's private equity and investment banking
activities increased despite extremely difficult market conditions and the
uncertainty surrounding Peregrine's previous investment banking vehicle,
McCarthy Bank Holdings. The sale of a part of Peregrine's shareholding in SA
Home Loans and the purchase of an additional stake in Citadel were effected
during the year.
All investments continue to be carried at the lower of cost or net
realisable value, with profits for the year accruing only from realisations.
With the introduction of AC 133, this policy will require modification in
the ensuing financial year.
During the year, Peregrine acquired a 25% stake in Agio Capital Management,
an empowerment investment and corporate advisory house. Agio invests its own
proprietary and third party capital into established private businesses,
listed businesses and state-owned businesses that are currently undergoing a
process of privatisation.
Financial software development
* Peregrine Systems
* Modelware
Although its financial performance for the year under review was below
expectation, Peregrine Systems (Peresys) continues to entrench itself as a
leading software provider to the South African financial services industry.
Peresys' profitability is expected to be materially enhanced as a result of
its recently announced business relationship with the JSE Securities
Exchange South Africa (JSE), following the JSE's tie-up with the London
Stock Exchange.
Peresys' messaging technology, middleware and Hermes front-end system are
expected, within the next several months, to become the industry standard
for the local stockbroking and asset management community, with
international expansion currently being explored.
Prospects
The businesses of Peregrine have emerged from a difficult year on a very
sound footing. The group is well poised for growth in each of its four core
divisions and it is expected that Peregrine will continue to expand on its
presence in the financial services industry.
The directors are confident that in the absence of unforeseen circumstances,
earnings for the year ending 31 March 2002 should materially exceed those
achieved for the year under review.
Declaration of cash dividend
Notice is hereby given that a cash dividend of 11,0 cents per share has been
declared, payable on 27 July 2001, to shareholders registered in the books
of the company at close of business on 29 June 2001.
Board appointments
The company is pleased to announce the appointment of Jonathan Hertz as an
executive director of the company. Mr Hertz will replace Gavin Kretzchmar
who has resigned his executive directorship with effect from
24 May 2001.
The board also welcomes the appointment of Advocate Leonard Harris as a non-
executive director of the company, with effect from 24 May 2001.
By order of the board
Stephen M Levenberg Sean A Melnick
Chairman Chief Executive Officer
Sandton
25 May 2001
Directors
S M Levenberg (Chairman)*, S A Melnick (CEO), K D Cimring,
A P Faure*, P Goetsch, L Harris*, J Hertz, R Stumpf*
*Non-executive
Transfer secretaries Registered address
Mercantile Registrars Limited 6A Sandown Valley Crescent
8th Floor, 11 Diagonal Street Sandown
Johannesburg 2001 Sandton 2196
www.peregrine.co.za
